Altona Limited purchased delivery equipment on March 1, 2010, for $130,000 cash. At that time, the equipment was estimated to have a useful life of five years and a residual value of $10,000. The equipment was disposed of on September 30, 2012. Altona uses the diminishing-balance method with a 20% rate of depreciation and has an August 31 year end.

Instructions

(a) Record the acquisition of equipment on March 1, 2010.

(b) Record depreciation at August 31, 2010, 2011, and 2012.

(c) Record the disposal of the equipment on September 30, 2012, under each of the following independent assumptions:

1. It was sold for $60,000.

2. It was sold for $80,000.

3. It was retired.